In our last installment on home loans we looked into the world of refinancing. The most obvious reason that homeowners look into new mortgage options is to save money. Saving money is important to all of us. Homeowners don’t need to waste money making interest payments when they can refinance their current high interest rates. The extra money can be put towards paying more towards the principal, paying off high interest credit cars, doing major home renovations, putting a child through school or even something frivolous like taking a family vacation.
There are a ton of situations that make it necessary to look into refinancing. In our first installment we looked at several situations in which it makes sense to refinance your current mortgage. Here are a few more situations where it makes sense to consider refinancing.
If your home value has increased, the equity in your home as also increased. This is something many homeowners want to take advantage of this “extra” money. Homeowners may want to put money back into their home with renovations and upgrades. Others may wish to use that money to pay off higher credit cards rates while some may even want to use the money towards a vacation.
Some homeowners are stuck in mortgages that have a fee associated with paying your mortgage off early. It is a fee that basically makes it impossible to make extra payments towards the principal on your homes mortgage. Homeowners will refinance these loans in favor of reducing the overall size of their mortgage. They will look for an option that does not have fees associated with extra payments and early payoffs.
Another option for this situation is to look for a mortgage options that offer a ten to fifteen year payoff putting more monthly towards the principal of the loan. When you take on a mortgage over this amount of time your payment goes more towards the interest then the principal. The first years of paying on a thirty year mortgage you will see that you pay like seventy-five percent interest twenty-five percent principal. Where as a fifteen year mortgage the interest payment may be more around fifty to twenty-five percent of the payment and the rest principal. This allows you to pay less in interest, saving you money over the lifetime of your mortgage.
No matter what your current situation is it makes sense to refinance your mortgage if it saves you money. This of course is not the only reason homeowners look to refinance. Some look to refinancing as an option to lower their monthly payment. Maybe they have recently taken a decrease in pay. Homeowners may look into refinancing in order to stretch their mortgage out over a greater period of time which in turn will lower the payment they are currently responsible for.
To see if refinancing is the best option for your situation speak with a local mortgage broker. They will review your current mortgage, current life situation and present you with a number of options that will help you meet your ultimate refinancing end goal.
Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.
